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Former Sun-Diamond Lobbyist
Receives a Split Decision in Trial

By

Bruce IngersollStaff Reporter of The Wall Street Journal

Updated Nov. 26, 1997 12:25 a.m. ET

WASHINGTON -- A onetime corporate lobbyist for Sun-Diamond Growers of California has been convicted of giving illegal gratuities to former Agriculture Secretary Mike Espy and acquitted of making illegal campaign contributions to Mr. Espy's brother.

A federal jury in San Francisco returned the split decision Monday night in the criminal trial of Richard Douglas, a prominent Washington lobbyist known for his strong Republican Party ties and 25-year friendship with Mr. Espy, a former Mississippi congressman.

Mr. Douglas was found guilty of giving $7,600 in gratuities to Mr. Espy, including an expensive set of luggage and a $4,590 weekend in New York for the 1993 U.S. Open tennis tournament.

Prosecutors for Independent Counsel Donald Smaltz convinced the jury that Mr. Douglas was acting at the behest of Sun-Diamond Growers, of Pleasanton, Calif., which relies heavily on Agriculture Department purchases of raisins and other dried fruits and on government subsidies to promote its Sun-Maid, Sunsweet and Diamond Walnut brands overseas. Defense lawyer John Keker contended that the gifts were merely tokens of friendship and that Mr. Douglas wasn't trying to ingratiate himself when he picked up restaurant tabs and did other favors for Mr. Espy.

The jury deadlocked on a second gratuity count, failing to decide whether Mr. Douglas gave a $3,100 airplane ticket to Mr. Espy so that his former girlfriend could accompany him on a 1993 trip to Greece.

Last year, Sun-Diamond paid a $1.5 million fine after being convicted of bestowing illegal gifts on Mr. Espy and making illegal contributions to his brother, Henry, who ran for Mike Espy's vacant House seat in 1993 and lost. In that case, the key prosecution witness was James Lake, a well-connected GOP lobbyist who pleaded guilty two years ago to helping funnel $4,000 in contributions to Henry Espy's campaign. (Henry Espy, mayor of Clarksdale, Miss., hasn't been charged in the matter of campaign contributions.)

But in Mr. Douglas's case, Mr. Lake's testimony didn't sway the jury, which voted to acquit the former Sun-Diamond senior vice president of mail fraud and election-law violations.

Tuesday, Mr. Keker said that he will ask the trial judge to throw out the illegal-gratuity conviction on the grounds that the case shouldn't have been tried in San Francisco. "The Northern District of California was the wrong venue," he said. "Everything happened in Washington, New York, Greece or someplace else." If the judge disagrees, Mr. Keker said, he will appeal the conviction. Mr. Douglas faces a maximum sentence of two years in prison and a $250,000 fine.

Meanwhile, Mike Espy, who resigned as agriculture secretary at the end of 1994, is awaiting trial here; no date has been set. In August, a federal grand jury handed up a 39-count criminal indictment against Mr. Espy, including charges that he accepted more than $35,000 in "things of value," for himself, his ex-girlfriend and three siblings, from companies with business pending before the Agriculture Department, including Sun-Diamond and
Tyson Foods Inc.
Mr. Smaltz continues to investigate the Arkansas poultry giant, which has denied any wrongdoing.

Mr. Espy repeatedly has rejected all allegations of wrongdoing, and his lawyer, Reid Weingarten, has accused the independent counsel of trying to distort "entirely benign activities" into criminal acts.

Former Sun-Diamond Lobbyist
Receives a Split Decision in Trial

WASHINGTON -- A onetime corporate lobbyist for Sun-Diamond Growers of California has been convicted of giving illegal gratuities to former Agriculture Secretary Mike Espy and acquitted of making illegal campaign contributions to Mr.